FTC to investigate iTunes in-app purchases after receiving complaints
Parental complaints over iTunes App Store in-app purchases in children's games such as "Smurfs' Village" have prompted the Federal Trade Commission to look into the matter, according to a new report.
Earlier this month, The Washington Post wrote about growing parental and public interest group dissatisfaction with Apple's in-app purchase policies. After learning of the issue, U.S. legislator Rep. Ed Markey sent a concerned letter to the FTC.
FTC Chairman Jon Leibowitz responded to Markey's correspondence on Tuesday. "We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases," Leibowitz wrote. "Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications."
Markey issued a statement commenting on the FTC's response. ?I sent the Federal Trade Commission a letter calling on the agency to investigate the issue of 'in-app' purchases and provide additional information about the promotion and delivery of these applications to consumers, especially with respect to children," Markey wrote. "What may appear in these games to be virtual coins and prizes to children result in very real costs to parents. I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area."
After consumers began complaining of "accidental" in-app purchases in Capcom's "Smurfs' Village" app, Apple reportedly had harsh words for the developer earlier this month.
"Apple has told Capcom in no uncertain terms that its freemium children's game has been causing problems with an increasingly significant number of parents who have complained that their children have been racking up large amounts of in-app purchases without their knowledge," said one report.
Also at issue is an iOS feature that can allow purchases for up to 15-minutes after a password is entered. Some parents have reported having their password guessed by their children. Though in-app purchases can be disabled in the Restrictions settings pane in OS, public interest groups are lobbying for the setting to be disabled by default.
Responding to complaints of accidental purchases, Capcom recently added a disclaimer on iTunes and an in-app pop-up warning notifying users that items purchased in the game can cost real money.
In December last year, users complained of unauthorized in-app purchases from a Chinese language game. Several reviewers of the game alleged that their accounts had been "hacked" and purchased had been made without their approval.
Apple first introduced in-app purchases with the release of iOS 3.0 in 2009. The feature was initially limited to paid applications, but was made available to free apps later that year.
The iPhone maker receives 30 percent of the revenue generated from in-app purchases.
Recent Congressional involvement resemblesa situation, also involving Markey, that took place over Apple's iOS privacy policy last year. The LA Times erroneously reported in June that Apple had revised its privacy policy to begin tracking users' locations. After reading the report, Markey sent a letter to Apple Chief Executive Steve Jobs asking for clarification on the issue.
Apple general counsel Bruce Sewell responded in July, detailing Apple's privacy policy regarding location-based services.
"Apple's responses provided additional information about how it uses location data and the ability of consumers to exercise control over a variety of features on Apple's products, and I appreciate the company's response," Markey said in a statement at the time.
Earlier this month, The Washington Post wrote about growing parental and public interest group dissatisfaction with Apple's in-app purchase policies. After learning of the issue, U.S. legislator Rep. Ed Markey sent a concerned letter to the FTC.
FTC Chairman Jon Leibowitz responded to Markey's correspondence on Tuesday. "We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases," Leibowitz wrote. "Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications."
Markey issued a statement commenting on the FTC's response. ?I sent the Federal Trade Commission a letter calling on the agency to investigate the issue of 'in-app' purchases and provide additional information about the promotion and delivery of these applications to consumers, especially with respect to children," Markey wrote. "What may appear in these games to be virtual coins and prizes to children result in very real costs to parents. I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area."
After consumers began complaining of "accidental" in-app purchases in Capcom's "Smurfs' Village" app, Apple reportedly had harsh words for the developer earlier this month.
"Apple has told Capcom in no uncertain terms that its freemium children's game has been causing problems with an increasingly significant number of parents who have complained that their children have been racking up large amounts of in-app purchases without their knowledge," said one report.
Also at issue is an iOS feature that can allow purchases for up to 15-minutes after a password is entered. Some parents have reported having their password guessed by their children. Though in-app purchases can be disabled in the Restrictions settings pane in OS, public interest groups are lobbying for the setting to be disabled by default.
Responding to complaints of accidental purchases, Capcom recently added a disclaimer on iTunes and an in-app pop-up warning notifying users that items purchased in the game can cost real money.
In December last year, users complained of unauthorized in-app purchases from a Chinese language game. Several reviewers of the game alleged that their accounts had been "hacked" and purchased had been made without their approval.
Apple first introduced in-app purchases with the release of iOS 3.0 in 2009. The feature was initially limited to paid applications, but was made available to free apps later that year.
The iPhone maker receives 30 percent of the revenue generated from in-app purchases.
Recent Congressional involvement resemblesa situation, also involving Markey, that took place over Apple's iOS privacy policy last year. The LA Times erroneously reported in June that Apple had revised its privacy policy to begin tracking users' locations. After reading the report, Markey sent a letter to Apple Chief Executive Steve Jobs asking for clarification on the issue.
Apple general counsel Bruce Sewell responded in July, detailing Apple's privacy policy regarding location-based services.
"Apple's responses provided additional information about how it uses location data and the ability of consumers to exercise control over a variety of features on Apple's products, and I appreciate the company's response," Markey said in a statement at the time.
Comments
Hooray.
Meh. It's not Apple's fault if developers make it easy to accidentally tap and pay large sums of money, especially in a children's game. I imagine they have two good options: revise the policies of the App Store to make such behavior be grounds for rejection, and/or allow for more customization of settings regarding Store and IAP.
Apple should log you out of the App store immediately upon launching a new app. This way, the kids can not make any purchases without entering the iTunes password.
Could it be good ol' Darwin at work here? Seriously, just turn In-App purchases off when you hand the device to your child. If you're too much of an idiot to toggle a switch, you shouldn't be having children, using technology or electing corrupt officials into office.
Apple should log you out of the App store immediately upon launching a new app. This way, the kids can not make any purchases without entering the iTunes password.
Right, but what about those who don't have children/those who don't want to be logged out? That's why I think it should be a setting.
And they ALREADY have a switch in Settings to disable in-app purchases, among other parental controls. Using those controls solves the problem of children buying unwanted stuff.
Maybe Apple should include a giant sticker for parents, reminding them to consider the Parental Controls.
I don't blame apple. I do think some parental controls (by the device and parents) could help this particular situation.
Maybe 5 year olds shouldn't be handed a $700 cell phone that could allow them to make purchases. Just 1 opinion.
I don't blame apple. I do think some parental controls (by the device and parents) could help this particular situation.
No kidding. And I've seen plenty of kids with iPhones, trust me.
More nanny state government to cover for irresponsible parents.
No wonder this country is broke and the last 2 generations have been nothing more than a bunch of "adult" children.
We got away withplaying video games for months before his dad found out because of the warm monitor. He was so surprised of our effort he actually removed the password and let us play openly when he wasn't home.
Anyway point of the story, Smart parents have smart kids. Don't think your kids can't figure out your password. Try to tell them why they shouldnt waste money instead.
Problem is that most of us trust that any such purchase would require a password. I mean, our password is required to download "free" apps. Word has not gotten around that no such password is required for in-app purchases. So, I wouldn't be so quick to blame it on 'parent irresponsibility' as some earlier have.
I think it would be great for Apple to make the default setting one that disables in-app purchases to begin with. And if one decides to activate it, mandate passwords for each purchase. If kids find out your password, that's on you then.
They make it so every purchase every time requires the password, the 'adults' will complain. And it doesn't fix the way too easy to guess password issues, or things like Momma $1400 who had told her kids the password.
If they force games to have no buys, the developers will yell at them for being over controlling etc. Censoring how games can be written etc.
I have no real love for Smurf's Village because I found it to be rather lame with the same games over and over etc. Speeding it up might help or not.
In the end the best advice for those with kids is to not have a credit card on your account. Added bonus if someone hacks your account they can't clean out your checking account etc. or if it is the kids device let them learn some responsibility with an allowance account.
I remember me and my friend actually used brute force to guess a password of his dads pc. It took us about a week a an hour or so a day just going 0000, 00001 etc etc. We knew it was numbers only cause he used the number pad to enter it in.
We got away withplaying video games for months before his dad found out because of the warm monitor. He was so surprised of our effort he actually removed the password and let us play openly when he wasn't home.
Anyway point of the story, Smart parents have smart kids. Don't think your kids can't figure out your password. Try to tell them why they shouldnt waste money instead.
People should be reading the story and not just the headline. And the FTC should be investigating apple or it's in app purchases program that forces companies to offer up the same price to ios users that they offer up through other channels never mind the investment involved in supporting iOS.
My child inadvertently made a $99 in-app purchase. Thankfully Apple refunded my money.
Problem is that most of us trust that any such purchase would require a password. I mean, our password is required to download "free" apps. Word has not gotten around that no such password is required for in-app purchases. So, I wouldn't be so quick to blame it on 'parent irresponsibility' as some earlier have.
I think it would be great for Apple to make the default setting one that disables in-app purchases to begin with. And if one decides to activate it, mandate passwords for each purchase. If kids find out your password, that's on you then.
It's not that hard to turn it off. It takes all of 20 seconds to toggle a button and save a passcode so it can't be tampered with. As the majority of iPhones being bought arent by irresponsible kids and rather teens and adults, having this on by default seems fine.
Also, in-app purchases DO require your iTunes password, as long as you haven't entered it to download something from the store 15 minutes prior. After that timeframe, you'll need to enter it again
People should be reading the story and not just the headline. And the FTC should be investigating apple or it's in app purchases program that forces companies to offer up the same price to ios users that they offer up through other channels never mind the investment involved in supporting iOS.
Stay tuned.
Sent from my iPhone.
/sigh
Meh. It's not Apple's fault if developers make it easy to accidentally tap and pay large sums of money, especially in a children's game. I imagine they have two good options: revise the policies of the App Store to make such behavior be grounds for rejection, and/or allow for more customization of settings regarding Store and IAP.
Well there receiving 30% of the money so they should have some sort of responsibility.
Personally I think this is in everyones interest. It won't hurt users having it off by default and its also better for developers. Remember every example like iOCDad where people have there money refunded its being refunded 100% by the developer and Apple still keeps there 30%.
How about AT LEAST giving the customers the OPTION of REQUIRING entering the account password every single time!!! I have accidentally bought rented something because my fat fingers were unable to easily hit preview button versus the buy/rent button. The location of the button AND the lack of a password requirement (after the first password entry) is either:
1. clearly designed by a moron, or...
2. intentionally designed to take advantage of peoples' mistakes and make extra $$ off of them.
This one issue would alleviate many of the complaints against Apple. (Not the subscription B.S. albeit)